At one extreme, Germany, known for its orthodoxy and budgetary rigor, at the other, Italy, known for not complying with EU budgetary rules. Perhaps what brought them closer was the recent decision of the German Supreme Court to question the German Government for the incorrect use of extra-budgetary funds, which placed the situation of public finances in Germany in a precarious situation.
What is certain is that the leaders of the two countries met and both the German Chancellor, Olaf Scholz, and the Italian Prime Minister, Giorgia Meloni, highlighted the progress in seeking an agreement on the European Union’s new fiscal rules before the end of the year.
The EU’s Stability and Growth Pact, which limits debt to 60% of GDP and deficits to 3% of GDP that bind eurozone economies, was suspended during the pandemic to allow for spending. With the reintroduction of the rules on January 1, governments intend to implement a new system that takes into account specific issues in each country.
While there is still no agreement on how much leeway to allow each Member State and when and whether exceptions should be made, the German leader said a resolution is “much closer.”
“For us it is clear that we want stability rules to play a role,” Scholz told journalists in Berlin, alongside Meloni. “But at the same time, it is also clear to us that no country will be forced to adopt an austerity program.”
Meloni reinforced Italy’s position that rules should protect investments, including spending related to the green transition and defense across the bloc.
“It is important that the new governance rules take into account the efforts made by countries to support these transitions, these strategic choices,” said Meloni.
The two leaders pledged to cooperate more closely on energy, defense and migration at the highest-level meeting between their governments in the last seven years. Scholz was to host a joint cabinet meeting with ministers from Rome, a format reserved for close allies.
Scholz, a social democrat, and Meloni, from the far-right Brothers of Italy, aim to work together despite their political differences. Scholz reiterated that he is carefully examining an Italian plan to build two asylum processing centers on Albanian territory.
If the extremes touch, it is very likely that other EU countries will follow suit and the Germany-France axis, which until now has been at the center of EU decisions, could be replaced by the triangle of Germany, France and Italy.
By José Correia Nunes
Executive Director Portal de Angola